TORONTO, ONTARIO (April 21, 2009) -- Aastra Technologies Limited - (TSX: “AAH”) is pleased to report its unaudited financial results for the first quarter ended March 31, 2009.
Net earnings improved significantly in the first quarter in 2009 to $14.1 million or $1.02 diluted earnings per share compared to $5.3 million or $0.33 diluted earnings per share in the same period in 2008.
Sales for the three months ended March 31, 2009 were $219.3 million compared to $140.0 million for the same quarter in 2008. The Company experienced a significant increase in revenue in all regions as a result of the acquisition of the Ericsson Enterprise portfolio which closed on April 30, 2008. Sales decreased by 16.2% from $261.8 million in the fourth quarter of 2008. This sequential decrease is partly due to the seasonality of the business, but it also appears that the current economic crisis has had an impact on the sales results in the quarter.
Gross margin increased to 48.0% of sales in the first quarter of 2009 compared to 44.4% of sales in the same period in 2008 and 47.0% of sales in the fourth quarter of 2008. The increase in gross margin in the quarter resulted from the addition of the former Ericsson product lines as well as a continued improvement in overhead costs and a favourable product mix.
Research and development expenses in the first quarter of 2009 were $21.9 million or 10.0% of sales, compared to $13.7 million or 9.8% of sales in the same quarter of 2008 with the increase attributable to the acquisition from Ericsson. The Company continues to streamline its R&D investments and explore synergy opportunities across its product lines.
Selling, general and administrative expenses were $60.3 million or 27.5% of sales in the first quarter of 2009 compared to $38.2 million or 27.3% of sales in the first quarter of 2008. Selling, general and administrative expenses included significantly higher provisions for bad debts in the first quarter this year when compared to the level recorded in the first quarter last year.
Amortization expense recorded in operating expenses increased to $5.9 million in the first quarter of 2009 compared to $3.3 million in the first quarter of 2008 as a result of the inclusion of amortization on the intangible assets added as part of the acquisition from Ericsson.
The Company recorded interest expense of $0.7 million in the first quarter of 2009 as a result of the term loan added as part of the 2008 acquisition. Foreign exchange gains were $0.8 million in the first quarter of 2009, compared to a foreign exchange loss of $0.9 million in the first quarter of 2008, due to the relative weakness in the Canadian dollar to the Euro and U.S. dollar in the first quarter of 2009.
Investment income totaled $0.7 million in the first quarter compared to $1.3 million in the same quarter of 2008, mainly as a result of lower average rates of return on excess cash balances.
Cash and short-term investments totaled $66.9 million at the end of March 2009 compared to $98.2 million at December 31, 2008, a decrease of $31.3 million. During the first quarter of 2009, the Company generated $20.2 million in cash flow from operations but increased its investment in non-cash working capital by $13.7 million. In addition, the Company used $17.7 million of its cash to repurchase 1.4 million of its own common shares during the first quarter and used $14.9 million of its cash to repay a portion of its long-term loan balance.
About Aastra Technologies Limited
Aastra Technologies Limited (TSX:AAH) is a global company at the forefront of the Enterprise Communication market. Headquartered in Concord, Ontario, Canada, Aastra develops and delivers innovative and integrated solutions that address the communication needs of businesses small and large around the world. Aastra enables Enterprises to communicate and collaborate more efficiently and effectively by offering customers a full range of open standard IP-based and traditional communications networking products, including terminals, systems, and applications. For additional information on Aastra, visit our website at http://www.aastra.com .
From time to time, we make written or oral forward-looking statements within the meaning of applicable Canadian securities legislation. We may make such statements in this press release, in other filings with Canadian regulators in reports to shareholders or in other communications. These forward-looking statements include, among others, statements with respect to our objectives, and strategies to achieve our objectives, as well as statements with respect to our beliefs, outlooks, plans, objectives, expectations, anticipations, estimates and intentions. The words "may," "could," "should," "would," "suspect," "outlook," "believe," "plan," "anticipate," "estimate," "expect," "intend," "forecast," "objective" and words and expressions of similar import are intended to identify forward-looking statements. By their very nature, forward-looking statements involve numerous factors and assumptions, and are subject to inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements.
As described in detail under the heading "Risk Factors" in our Annual Information Form filed on www.sedar.com, the material factors that could cause our actual results to differ materially from the forward-looking statements in this press release include: the global economical and financial crisis impacting businesses worldwide, exchange rate fluctuation of the Canadian dollar against other currencies, particularly with respect to the Swiss franc, Swedish krona, Euro and US dollar; product concentration and limited range of products; continued demand for our products; geographic market concentration in Europe; reliance on third party manufacturers and component suppliers; longer credit terms to customers; continued implementation of our enterprise resource planning system; potential fluctuations in quarterly financial results, particularly as a result of seasonality and geographic market concentration; risks associated with product returns and defects; consolidation, reorganization and rapid technological change in our market; competition and the risk of third party claims for infringement; and other risk factors that our business faces.
We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to us, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Additional information about these factors that may affect future results can be found under the "Risk Factors" section and in our 2008 Annual Information Form. We do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by us or on our behalf.
For further information contact:
Kathy Ristic, V.P. Finance,
(905) 760-6704
investors@aastra.com
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